CHAPTER 5. Medicine [2000 - 2525.5]

California is currently experiencing a geographical and specialty maldistribution of physicians and surgeons. It is the intent of the Legislature to address these problems by assisting licensed physicians and surgeons in establishing medical practices in areas deficient in physician services and primary care specialties.

(b) “Division” means the Division of Licensing of the Medical Board of California.

(c) “Practice of medicine” or “medical practice” means all activities authorized by a physician’s and surgeon’s certificate, except activities performed in the course of employment as a public health officer, as a medical school faculty member where teaching time is more than 25 percent of the working day, or as a resident or first-year postgraduate trainee.

(d) “Primary care services” means those medical services involving the specialties of general practice, family practice, general internal medicine, obstetrics, gynecology, and general pediatrics.

The division shall award loans on the basis of local need and those areas of the state which are deficient in primary care services, as determined by the commission, to applicants it determines will establish medical practices in such areas.

Loans made pursuant to this article shall be repayable to the Contingent Fund of the Medical Board of California or cancelled under the following conditions:

(a) A licensed physician and surgeon who establishes and maintains a medical practice in an area deficient in primary care services for less than one year shall repay the total amount of the loan, in addition to accrued interest charges.

(b) A licensed physician and surgeon who establishes and maintains a medical practice in an area deficient in primary care services for more than one year, but less than two years, shall repay half the total amount of the loan, in addition to accrued interest charges.

(c) The total amount of the loan and all accrued interest shall be canceled for a licensed physician and surgeon who establishes and maintains a medical practice in an area deficient in primary care services for more than two years from the date the loan is made.

The liability to repay the loan shall be cancelled upon the death of the borrower, or if the division determines that he or she has become permanently disabled and is unable to engage in substantial gainful activity.

(a) In addition to the principal of the loan, interest shall accrue on the principal of all loans made at a rate which shall be two percentage points less than the authorized interest rate on California Water Bonds at the time the application is filed. Interest shall accrue from the date the loan is made until it is repaid unless the loan is canceled pursuant to Section 2208 or 2209.

(b) Loans made pursuant to this article which are not canceled shall be repayable to the Contingent Fund of the Medical Board of California under the terms specified in such loan agreements in periodic installments, according to the schedule agreed upon by the division and the borrower, over a 10-year period which shall begin one year after the borrower ceases to operate his or her medical practice in an area deficient in primary care services, excluding from such 10-year period all periods, up to three years, of (1) active duty performed by the borrower as a member of the armed forces of the United States, or (2) nonmilitary public service performed by the borrower which the division finds to be in the public interest.

The division may assess a charge with respect to a loan made under this article for failure of the borrower to pay all or part of an installment when due and, in the case of a borrower who is entitled to a loan cancellation under Section 2208, for any failure to file timely and satisfactory evidence of such entitlement. The amount of any such charge may not exceed five dollars ($5) for each month by which the installment or evidence is late, except that there shall be no charge for the first month.

The commission shall, under the provisions of this article, make a determination in priority as to which areas of the state are deficient in primary care services and the degree to which these areas are underserved. This study shall be updated biennially and shall be the basis for notifying loan recipients of areas which will satisfy the loan repayment provisions of this article.